Increase in National Living Wage?
An independent review into the evidence on minimum wage rates has been published by the government. The review concludes that increases in the National Living Wage (NLW) have little effect on employment whilst significantly increasing the earnings of low paid workers. This was found to be the case even in countries who had the most ambitious policies for increasing minimum wage rates. The report also concluded that there was room for the UK to explore a more ambitious National Living Wage (NLW) ... read more
Employing staff for the first time
There is a multitude of rules and regulations that you must be aware of when you start employing staff for the first time. A full examination of the rules is beyond the scope of this article. However, we wanted to list the following points from HMRC’s guidance which sets out some important issues to be aware of when becoming an employer.
Decide how much to pay someone - you must pay your employee at least the National Minimum Wage.
Check if someone has the legal right to work in the ... read more
Basic business structures
It is important to be aware of the main basic business structures available if you are considering starting a new business. There are three commonly used forms of business structure.
A sole trader – this is the simplest way of starting and running a business. However, you are personally responsible for your business’s debts. You also have accounting responsibilities.
A limited company – the business is quite separate to you as a person, but there are more reporting and ... read more
HMRC’s tax app
A free HMRC tax app is available to taxpayers.
The APP can be used to see:
your tax code and National Insurance number
an estimate of the tax you need to pay
your income and benefits
up to 12 future tax credits payments
your Unique Taxpayer Reference (UTR) for Self-Assessment
The APP can also be used to complete a number of tasks that usually require the user to be logged on to a computer.
renew your tax credits
access your Help to Save account
using HMRC’s ... read more
Tax when partnership assets are distributed in kind
Partnerships are treated as transparent for Capital Gains Tax (CGT). This means that each partner is responsible for their share of any capital gains arising on the disposal of their interests in the assets of the partnership. Each partner is treated as owning a fractional interest in each of the assets of the partnership.
It is important to be aware of the rules where partnership assets are distributed in kind to one or more partners. This type of distribution can occur, for example, by a ... read more
Furnished holiday let qualifying tests
The furnished holiday let (FHL) rules allow holiday lettings of properties that meet certain conditions to be treated as a trade for certain tax purposes.
In order to qualify as a furnished holiday letting, the following criteria need to be met:
The property must be let on a commercial basis with a view to the realisation of profits. Second homes or properties that are only let occasionally or to family and friends do not qualify.
The property must be located in the UK, or in a country ... read more
Waivers of remuneration
A waiver of remuneration happens when a director or an employee gives up their right to salary or other cash remuneration and gets nothing in return. Where the employee gets a non-cash benefit in return, this is called a salary sacrifice.
The treatment of a waiver of remuneration, when a director / employee gets nothing in return, is different to the scenario when this is treated as a salary sacrifice.
The effect of a waiver for Income Tax purposes depends on its timing.
If the remuneration ... read more
Last chance to claim enhanced capital allowances
There is a special scheme known as the enhanced capital allowances (ECA) scheme for energy-saving technologies. The ECA scheme enables a business to claim accelerated tax relief 100% first year allowances (FYA) on qualifying energy efficient and environmentally beneficial technologies.
The accelerated tax relief is designed to encourage businesses to invest in technologies that are energy saving, reduce water use and improve water quality. The ECA schemes are particularly beneficial for those ... read more
Finance Bill 2019-20 shelved
The Government’s draft finance bill has been shelved as we countdown to the general election on 12 December 2019. The consultation on the draft legislation has closed, but the prorogation controversy and Brexit issues meant there was no time for the Government to respond to any of the issues raised.
The Bill contained the legislation for some of the tax measures that were announced by the Government at Autumn Budget 2018. Many of these measures have been the subject of further ... read more
What is a negligible value claim?
A negligible value claim is a claim made by a taxpayer when an asset they own has become of negligible value, i.e. it is worthless or worth next to nothing. The taxpayer effectively treats the asset as having been disposed of and then immediately reacquired at the negligible value. The asset must still be owned by the person making the claim and must have become of negligible value whilst it was owned.
Making a claim allows the owner of the asset to realise a capital loss in respect of an asset ... read more